EUTELSAT COMMUNICATIONS Investor Presentation May 2021 AGENDA
1. FSS Industry 2. Eutelsat in a snapshot 3. Q3 FY 21 performance 4. Outlook 5. Appendix
2 THE SATELLITE VALUE CHAIN
TV broadcasters, Satellite Satellite Satellite Telecoms, Consumers manufacturers launchers operators Governments & businesses
3 BUSINESS CHARACTERISTICS
•High barriers to entry
Finite resource of orbital positions and frequencies, heavily regulated at international level with key commercial orbital positions have already been developed
High upfront CAPEX before operations
High technology and technical expertise through satellite lifecycle
•Profitable business model
Significant backlog with long term contracts
Economies of scale
High operating margins
Predictable operating cash flow
4 TRENDS IN OUR HERITAGE BUSINESSES
BROADCAST DATA & GOVERNMENT PROFESSIONAL VIDEO SERVICES
Resilient channel line-up Global demand increase driven Bandwidth-hungry usages, by rising connectivity needs increasing defence budgets and Ongoing HD growth remote connectivity needs to Improved compression formats Substantial pricing pressure drive growth Slight decline in Europe largely Ongoing decline of GEO GEO to benefit from ETL offset by progression in selected business Quantum upcoming flexible EM markets capacity and hosted payload NGSO to capture much of future Temporary slowdown in the pace opportunities of new business against the growth current operating backdrop NGSO to further broaden the market
Underlying GEO structurally Pockets of resilience declining opportunity
5 SIGNIFICANT BROADBAND MARKET FOR SATELLITE
Substantial long-term (2030+) core adressable Demand for ubiquitous connectivity market of premises durably beyond the reach of boosted by Covid-19 induced lock-downs terrestrial infrastructure (4G, 5G, Fiber) • ~4M premises in Europe Positive consumer feedback for satellite BB • ~5M premises in Africa • >90% of Satellite BB customers are satisfied with their connectivity1 Medium-term addressable market even larger • 60 to 70% of HH in areas with poor terrestrial ahead of planned terrestrial rollouts coverage show high interest in satellite BB offers2
Adressing Telecom Operators’ requirement for universal coverage
Market able to accommodate several players
1 Source: Eutelsat market study, July 2020, based on 200 BB homes in UK, Germany, Italy 6 2 Source: Eutelsat market study, July 2020, based on 500 interviews per country in UK, Germany, Italy SUBSTANTIAL LONG-TERM OPPORTUNITY IN NON-BROADBAND CONNECTIVITY Addressing multiple verticals worth almost $10bn
VERTICALS KEY APPLICATIONS DRIVERS 2029 MARKET1 10Y-CAGR2
Network extension Mobile backhaul Growing Data usages FIXED DATA Corporate networks $3.2bn +7% Ubiquitous coverage need Community Broadband USO pressure
Military / Security Defense budget increases GOVERNMENT Polar coverage Bandwidth-hungry usages $3.0bn +11% Civil government Connecting remote sites
Growing no of aircraft/ ships
In-flight Connectivity Improved equipment / take-up rates MOBILITY $3.2bn +15% Maritime Connectivity Enhanced service leading to higher usages
•1. Demand in 2029 based on Euroconsult assumptions 2. 2019-2029 compounded annual growth rate based on Euroconsult assumptions 7 VIDEO DRIVERS: CHANNEL GROWTH AND IMAGE QUALITY
CHANNEL GROWTH INCREASED IMAGE QUALITY
TV CHANNELS IN EMEA AND LATAM HD PENETRATION RATE BY MAJOR REGION
>22,600 41% CAGR: ETL footprint +0.1% 26% Russia and 24% 2024 2019 ~22,500 Central Asia 12%
21% SSA 9%
47% MENA 32%
53% LATAM 33%
Central 45% 2019 2020 2021 2022 2023 2024 Europe 29%
Western 59% Europe 37%
North 63% America 42%
Predominantly driven Everywhere, by emerging Video markets including mature Video markets
8 •Source: Euroconsult 2020 VIDEO DRIVERS: CAPACITY REQUIREMENTS VERSUS COMPRESSION TECHNOLOGY
EVOLUTION OF IMAGE QUALITY NUMBER OF CHANNELS
(NUMBER OF CHANNELS) PER 36 Mhz TRANSPONDER
25 000
FORMAT MODULATION MPEG-2 MPEG-4 HEVC 20 000
DVB-S ~15 - - 15 000 SD DVB-S2 - ~26 -
10 000 DVB-S - - - HD
5 000 DVB-S2 - ~9 ~15
UHD DVB-S2 - - ~3 0 2019 2020 2021 2022 2023 2024 Standard Definition High Definition Ultra High Definition and 3D
9 •Source: Euroconsult 2020, EMEA and LATAM VIDEO: SATELLITE’S COMPETITIVE ADVANTAGE OVER OTT / IP
COST-EFFICIENCY UNIVERSAL REACH SERVICE QUALITY
FTTH/B HOUSEHOLDS PENETRATION1 BANDWIDTH REQUIREMENT (Mbps) OTT 49% 52%
43% 1 UHD channel in HEVC 20 COST 1 HD channel in MPEG 4 7
Satellite 1 SD channel in MPEG 2 3 17% 21% 7%
Italy Poland EU 28 Average
•Satellite a fraction of TV platforms 2020 2026 •Higher quality of image leading operating costs to increased bandwidth usage
CDN costs rise •Congestion of terrestrial networks •High cost of fibre roll-out in line with audience growth Video will represent •Terrestrial networks cannot reach entire •For a large Pay-TV platform, OTT population >80% of IP traffic in 2021 distribution would be much more expensive than satellite
Satellite more cost efficient >50k Satellite provides full Satellite and hybrid solutions viewers in Western Europe coverage of a market give unimpaired viewing experience
10 •Source: Eutelsat analysis, IDATE DigiWorld 2020
1 • Subscriptions / Households (in %) SATELLITE CONTINUING TO GAIN SHARE IN OUR FOOTPRINT Expansion of satellite households in most regions
Region Satellite 2015-2019 Satellite Satellite HH (m) CAGR penetration Rank
WEU 47m -1.5% 27% #2
CEU1 40m +0.1% 31% #1
MENA 58m +2.4% 66% #1
AFRICA 24m +11.8% 29% #1
EUTELSAT FOOTPRINT 169m +1.7% 36% #1
1 • 11 •Source: Digital TV Including Russia AGENDA
1. FSS Industry 2. Eutelsat in a snapshot 3. Q3 FY 21 performance 4. Outlook 5. Appendix
12 EUTELSAT IN A SNAPSHOT
KEY DATA REVENUE BREAKDOWN BY APPLICATION
•FY 20 revenues of €1.28bn
BY GEOGRAPHY Western Europe 9% 1 7% Central Europe •FY 20 DFCF of €474m 26% MENA 10% RCA SSA •Dividend per share of €0.89 10% 9% Americas APAC 7% 22% Unallocated and others •Fleet of 38 satellites; global coverage
•Operating >1,360 transponders
BY APPLICATION 6% Broadcast 6%
•Broadcasting >6,800 channels Data & Professional Video 13%
Government Services
•Backlog representing 3.5 years of revenues 61% 14% Fixed Broadband
Mobile Connectivity 1 • Adjusted discretionary free cash flow 13
•All data as of 31 March 2021, excluding revenues and DFCF which are for FY 2019-20 BREAKDOWN OF REVENUES BY APPLICATION
→ Direct-to-Home (DTH) BROADCAST 61% → Cable headends
→ Mobile backhaul DATA % CORE & PROFESSIONAL 14 → Corporate networks BUSINESSES VIDEO → Professional Video
→ Military GOVERNMENT 13% SERVICES → Security
→ Internet access for households FIXED 6% & corporates BROADBAND CONNECTIVITY → In-flight Connectivity MOBILE 5% CONNECTIVITY → Maritime Connectivity
14 •Data for FY 2019-20 EUTELSAT’S GLOBAL NETWORK
15 DFCF/ REVENUE RATIO DOUBLED IN FIVE YEARS
Reported DFCF / revenue 16% 28% 29% 31% 37% ratio
1,529 1,478 1,408 1,321 1,278
474 408 415 408 247
FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20
Adjusted DFCF growth1 +65% +12% +10% +6%
Total revenues Reported Discretionary Free Cash Flow 16 1 • growth as defined per financial objectives BOND & BANK DEBT MATURITY SCHEDULE
BOND & BANK DEBT MATURITY ONGOING DEBT OPTIMISATION SCHEDULE
€800m •Net Debt/EBITDA ratio of 3.09x in H1 FY 2020-21 1.125% vs 3.05x as of 30 June 2020 and 3.20x as of 31 €600m €600m December 2019 €67m
•Average cost of debt after hedging reduced to 2.3% €200m €300m €53m vs 2.4% in FY 2019-20 2.000% 2.250% 1.500% €400m €450m 3.125% •Average weighted maturity of 4.3 years €200m €80m vs 4.9 years excluding already refinanced June 21 Bond 20222022 2023 20242024 2025 2027 20282028 vs 4.2 years at 31 December 2019
Structured loan (drawn) / Outstanding Bonds undrawn RCF of Eutelsat S.A •Strong liquidity as of 31 December 2020 Term loan / undrawn line of credits EIB term loan (ETL SA) Cash and undrawn credit lines of > €1.7bn of Eutelsat Communications
Investment grade ratings confirmed
Note: Maturities are provided on a calendar year 1 Bond and Bank debt maturity schedule as of 1 May 2021, excluding ECA loans and leases 17 SHAREHOLDER STRUCTURE EUTELSAT SHAREHOLDING STRUCTURE AS OF 31 DECEMBER 2020
Bpifrance 19.98%
1 Free float CIC 6.73% and others 65.71%
FSP2 7.58%
1 18 • China Investment Corporation 2 Fonds Stratégique de Participations EQUITY STORY IN A NUTSHELL
Consistent delivery on below-topline objectives despite challenging environment for core businesses
Successful execution of cash generation strategy with cash flow/revenue ratio more than doubled in four years
Substantial medium term growth opportunities in Connectivity, with associated Capex and Opex already factored into financial objectives
Leverage of all elements of cash generation to invest in growth verticals
Investment in OneWeb representing a compelling entry point to address the considerable LEO opportunity
High level of shareholder remuneration maintained despite a 30% dividend cut: return to a stable to progressive Dividend Policy
19 ENTERING LEO SPACE THROUGH ONEWEB
•Attractive entry point to considerable LEO opportunity: $550m for a 24% stake in an almost fully funded promising growth asset just ahead of partial commercial rollout
•Oneweb ideally positioned to be among the winners in NGSO landscape thanks to strong spectrum rights, first mover advantage, powerful shareholder base and scalable technology
•Compelling economic potential with revenues to reach c.$1bn per annum in 3 to 5 years following full deployment and a highly profitable wholesale approach
Fully cash-funded and consistent with our financial objectives, hurdle rates, dividend policy and IG ratings
•Strong commercial potential for ‘win-win’ co-operation thanks to complementarity of resources and assets
20 AGENDA
1. FSS Industry 2. Eutelsat in a snapshot 3. Q3 FY 21 performance 4. Outlook 5. Appendix
21 HIGHLIGHTS
•Q3 revenues of €301m, in line with expectations
•€4.5bn backlog up 6% year-on-year and representing 3.5 years of revenues
•Favourable outturn of Spring 2021 renewal campaign with USG at a record-high 95% renewal rate
Sustained progress in our Fixed Broadband rollout
•Nine month performance enabling us to raise
•the bottom end of Full Year revenue objective range
•Entry into LEO space through investment in OneWeb
22 Q3 REVENUES IN LINE WITH EXPECTATIONS
Total revenues of €301m, down -6.4% Q3 YoY revenue bridge (€m) Slightly positive perimeter effect
• €2m contribution from BBB Europe -6.1%
+2 +8 Negative currency effect (11) • €/$ rate of 1.22 vs 1.10 last year (20)
Positive swing of €8m in ‘Other Revenues’ 322 • O/w +€8m related to hedging 301
Revenues of the Operating Verticals down 6.1% like-for-like YoY
Q3 2019-20 Currency Perimeter Change in Operational Q3 2020-21 reported Other trend reported 1 Revenues
1 Including Hedging revenues representing a +€8m impact
23 ROBUST COMMERCIAL ACTIVITY
Fixed Data Fixed Broadband Multi-year contract with New Multiple agreements strengthening Zealand's’ operator for African distribution capabilities backhaul with E172B
Government Services Mobility Spring 2021 renewal rate with USG Contract with Global Eagle for at c.95%, a record-high level inclined orbit capacity at 139° W
24 SUSTAINED PROGRESS IN FIXED BROADBAND ROLLOUT
PROGRESS IN WESTERN EUROPE STRENGTHENING DISTRIBUTION IN AFRICA
EUTELSAT KONNECT now at full coverage South Africa: Wholesale agreement with Vox following agreement Retail operations extended to new areas with Paratus • Extended to the full territory in Germany, Spain and the DRC: Testing wholesale distribution UK with Orange • Commercial service launched in Portugal Wifi Hotspots: Partnership with Facebook to roll Gross subscriber additions gaining pace out Express Wi-Fi hotspots across our African footprint Ongoing wholesale discussions with operators
Closing of the disposal of EBI1 completing the reorganization of our distribution
1 Eurobroadband Infrastructure subsidiary, carrying the KA-SAT satellite 25 Q3 FY 2020-21 REVENUES BY APPLICATION
REVENUE REVENUES LIKE-FOR-LIKE2 CONTRIBUTION1 (€m) YOY CHANGE
BROADCAST 62% 182 -6.8%
DATA & % PROFESSIONAL 13 40 -6.7% VIDEO
GOVERNMENT % SERVICES 13 37 -0.3%
FIXED BROADBAND 7% 21 +1.9%
MOBILE CONNECTIVITY 5% 16 -17.2%
TOTAL OPERATING VERTICALS 294 -6.1%
OTHER REVENUES 7 +€8m3
1 • Share of each application as a percentage of total revenues excluding “Other Revenues”. 2 • Change at constant currency and perimeter. The variation is calculated as follows: i) Q3 2020-21 USD revenues are converted at Q3 2019-20 rates; ii) Q3 2020-21 revenues are restated from the contribution of BBB to revenues. iii) Hedging revenues are excluded from Other Revenues. 26 3 • Of which +€’8m related to hedging revenues BROADCAST 62%
Q3 revenues of €182m, down 6.8% YoY like- 785 for-like1 in line with expectations • Impact of the renegotiation of contract terms with Greece’s Forthnet Q4 196 • Anticipated slowdown in the pace of new business due to Covid-19 crisis affecting notably distributors • Q3 2019-20 included a positive one-off of circa €1m Q3 199 182 Q3
Revenues down 2.8% QoQ Q2 195 188 Q2 Q4 revenues expected to be broadly stable Q1 195 191 Q1 vs. Q3
FY 2019-20 FY 2020-21 Channel count • 6,864 channels at end March 2021, stable YoY • HD up from 24% to 27% implying 11% YoY growth
1 • At constant currency and perimeter
27 DATA & PROFESSIONAL VIDEO 13%
Q3 revenues of €40m, down 6.7% Y-o-Y 1 like-for-like 175 Revenues down 4.0% Q-o-Q
Fixed Data Q4 43 • Highly competitive environment Q3 45 • Growth in volume notably in MENA and APAC 40 Q3 partly offsetting price pressure Q2 45 42 Q2 Professional Video still in decline Q1 43 40 Q1 • Structural headwinds • Phasing of a specific contract detrimental to H2 FY 2019-20 FY 2020-21 but neutral over the Full-Year
1 • At constant currency and perimeter
28 GOVERNMENT SERVICES 13%
Q3 revenues of €37m, down 0.3% Y-o-Y like-for-like1 161 • Contribution of EGNOS payload on E5WB • New business with USG customers • Negative carry-forward effect of 2020 USG Q4 43 renewals Q3 40 37 Q3 Record high spring 2021 USG renewal rate of c. 95% Q2 39 39 Q2
Q1 39 38 Q1 Q4 revenues to reflect a tougher comparison basis FY 2019-20 FY 2020-21 • Q4 2019-20 included a positive one-off related to the relocation of E7A.
1 29 • At constant currency and perimeter FIXED BROADBAND 7%
77 Q3 revenues of €21m, up 1.9% Y-o-Y like-for-like1 77 • Initial revenues from Konnect Europe including Orange contract Q4 • Growth at our African operations 19 • Decline in the contribution of KA-SAT 21 Q3 Q3 19 Revenues down 12.9% QoQ 22 Q2 • Q2 included a high level of terminal sales Q2 19
EUTELSAT KONNECT now operating with full 20 21 Q1 coverage Q1
FY 2019-20 FY 2020-21 Strengthening of distribution capabilities in Africa
1 • At constant currency and perimeter
30 MOBILE CONNECTIVITY 5%
Q3 revenues of €16m, down 17.2% YoY and 1 stable QoQ like-for-like 79 79 On-going impact of Covid-19 crisis on aero 17 mobility Q4 • Lower airtime-related revenues on KA-SAT • Lower revenues from certain service providers 21 Q3 16 Q3 Maritime remaining on an upward trend Q2 22 • Ramp-up of contracts signed in last couple of 16 Q2 years Q1 20 18 Q1
Agreement with Global Eagle for inclined FY 2019-20 FY 2020-21 orbit capacity at 139°West
1 • At constant currency and perimeter
31 BACKLOG & FILL RATE
BACKLOG (€BN) OPERATIONAL & UTILIZED TRANSPONDERS
Fill rate 69.7% 70.1% 69.5% 4.2 4.4 4.5 1,377 1,380 1,366
959 967 950 Operational Transponders Broadcast 67% 67% 64% Utilized Transponders
31 March 2020 31 Dec. 2020 31 March 2021 31 March 2020 31 Dec. 2020 31 March 2021
• Backlog up 6% YoY • Operating TPE down 11 units / utilized TPE down 9 units YoY • Including new EGNOS payload • End of E48D life in stable orbit • 3.5 years of revenues • Fill rate around 70% • Broadcast accounting for 64%
32 •Based on 36 MHz-equivalent transponders (TPE), excluding HTS capacity AGENDA
1. FSS Industry 2. Eutelsat in a snapshot 3. Q3 FY 21 performance 4. Outlook 5. Appendix
33 A TWO-PRONGED STRATEGY
1. MAXIMISE 2. LEVERAGE CASH GENERATION THE CONNECTIVITY VERTICALS OF THE HERITAGE BUSINESSES TO DELIVER REVENUE GROWTH
•Grow Fixed Broadband via our •Funding our transition towards high growth verticals… GEO assets, EUTELSAT KONNECT and KONNECT VHTS
•…whilst continuing to generate •Capture non-Broadband a high level of shareholder Connectivity opportunity via returns selected investments and OneWeb
34 REVENUE OBJECTIVE RAISED ONCE AGAIN
OPERATING VERTICALS ► Between €1,200 to €1,220m in FY 2020-211 REVENUES1 Vs. between €1,190m to €1,220m previously
► Not exceeding average of €400m2 per year CASH CAPEX for the period July 2020 to June 2022
ADJUSTED DISCRETIONARY ► Between €390m and €420m in FY 2021-223 FREE CASH-FLOW3
► Maintain investment grade rating LEVERAGE ► Medium-term net debt / EBITDA ratio of c. 3x
DISTRIBUTION ► Stable to progressive dividend policy
1 • Based on a €/$ rate assumption of 1.14 and including the combined impact of the acquisition of Bigblu Broadband Europe and the disposal of EBI but excluding the effect of other changes in perimeter if any. 2 • Including capital expenditure and payments under existing export credit facilities and other bank facilities financing investments as well as payments related to lease liabilities. 35 3 • Based on a €/$ rate assumption of 1.14, excluding one-off impacts such as hedging, effects of changes in perimeter (if any) other than the acquisition of Bigblu Broadband Europe and the disposal of EBI, and one-off costs related to specific projects in particular to the LEAP 2 program and to the move to new headquarters. FUTURE LAUNCHES
EUTELSAT KONNECT EUTELSAT NAME HOTBIRD 13F VHTS HOTBIRD 13G EUTELSAT 10B EUTELSAT 36D
Orbital Position 48°East 13° East TBD 13° East 10° East 36° East
Approx . Launch date1 Q3 2021 H2 2021 H1 2022 H1 2022 H2 2022 H1 2024
Manufacturer
Launcher TBD TBD TBD TBD
Coverage EMEA, Atlantic & Africa, Russia, Flexible Europe Europe Europe Indian Ocean Europe
Applications Connectivity Mobile Video Government Video Government Video Connectivity Government
Total Capacity 4 ~230 Ka / 4 12 Ku / 10C / (TPX2/Spotbeams) N/A 80 Ku 500 Gbps 80 Ku c.35 Gbps 70 Ku
o/w Expansion3 N/A ~230 Ka / -30 Ku - - 500 Gbps - c.35 Gbps
Electrical propulsion HTS Payload 1 2 3 • Calendar year | Physical transponders | Excludes unannounced redeployments 3 36 • “Nominal capacity corresponding to the specifications of the satellites. Total operational capacity at the HOTBIRD orbital position will remain unchanged with 102 physical transponders (95 TPE), once regulatory, technical and operational constraints are taken into account.” AGENDA
1. FSS Industry 2. Eutelsat in a snapshot 3. Q3 FY 21 performance 4. Outlook 5. Appendix
37 5. APPENDIX
5.1 2020-21 half year financials
5.2 OneWeb
5.3 Miscellaneous
38 PROFITABILITY
EBITDA (€m) H1 EBITDA margin of 76.7%1 down 1.1 points YoY 496 • Lower revenues 482 • Higher costs for Broadband activity including slightly dilutive impact from the consolidation of BBB Europe
Strong cost discipline in the core business Margin 77.8% 76.7% 77.4 77.4 77.5 • LEAP 2 programme well on track to deliver on objective with around half of €20-25 million in annual savings expected to be reached in FY21
H1 2019-20 H1 2020-21
1 • 76.7% at constant currency 39 NET INCOME
Extracts from the H1 H1 consolidated income CHANGE statement in €m1 2019-20 2020-21
Revenues 637 629 -1.3%
EBITDA2 496 482 -2.7%
Operating income 225 214 -4.9% ► Broadly stable D&A
Financial result (41) (47) +14.5% ► Positive impact of previous refinancing ► Negative non-cash impact related to FX losses
► Tax Rate of 14% vs 18% last year Income tax (34) (23) -32.2% ► Positive variation of deferred taxes ► 2 points decrease of French corporate tax rate Group share of net income 141 137 -2.3% ► Net margin of 22% unchanged versus last year
1 • Rounded to closest million; 40 2 • EBITDA defined as operating income before depreciation, amortization, impairments and other operating income/(expenses) ADJUSTED DISCRETIONARY FREE CASH FLOW
In €m 275
18 FX, Hedging & one-offs (117) related to LEAP 2 and to HQ move 435 (61) 1 (1) 257
Net Cash Flow from Cash Capex (1) Interest and Other fees paid Discretionary Free Cash Flow operations net of interests received
Change as per financial objectives +158
Reported change +82 +72 (5) +149
1 • Cash Capex covers the acquisition of satellites and other tangible or intangible assets, payments in respect of export credit facilities or other 41
• bank facilities financing investments as well as payments related to lease liabilities. If applicable it is netted from the amount of insurance proceeds. NET DEBT STABLE DESPITE DIVIDEND AND BBB ACQUISITION
In €m
(9) 56
(257) 205
2,999 2,994
Net Debt as of Reported Dividend Equity Other Net Debt as of 30/06/20 DFCF investments 31/12/20
42 FINANCIAL STRUCTURE
Net Debt/EBITDA ratio of 3.09x NET DEBT / EBITDA RATIO • Versus 3.20x as of 31 December 2019 Ongoing optimization of debt structure • €600m Eurobond with 8-year maturity and 1.5% coupon 3.20 3.09 • €200m 8-year EIB term loan to finance KONNECT VHTS at a rate of 0.49% • Early €200m repayment of Mar ‘22 €600m term loan (1.15% rate) Average cost of debt after hedging of 2.3% 77.4 77.4 77.5 • Versus 2.4% in H1 FY 20 Average weighted maturity of 4.3 years • 4.9 years excluding already refinanced June 21 Bond • Versus 4.2 y at 31 Dec 2019 31 December 2019 31 December 2020 Strong liquidity • Cash and undrawn credit lines of > €1.7bn as of end- December 2020
43 5. APPENDIX
5.1 2020-21 half year financials
5.2 OneWeb
5.3 Miscellaneous
44 KEY TERMS OF THE TRANSACTION
$550m investment 100% cash-funded
Investment in ordinary shares via a capital increase (no selling shareholder), resulting in a 24% stake in OneWeb
Eutelsat will become a main shareholder of OneWeb, jointly with HM Government and Bharti
Eutelsat will be the only satellite operator among the main shareholders
Similar governance rights to HMG and Bharti
Closing expected in H2 2021 (calendar year)
45 ONEWEB IN A SNAPSHOT
LEO CONSTELLATION SOLID CAPITAL BACKING ALMOST FULLY FUNDED WITH UNIQUE FEATURES OPENING OPPORTUNITIES LOW FUNDING TO GO
•Capital structure post Eutelsat investment 648 sats in Low-orbit ~$5bn total funds raised 1.1 Tbps of capacity (Ow $.1.4 bn since Chap. 11)
Fully global coverage Expected Since 24% 24% 2021 Nov. 20 Strong spectrum priority rights $0.5bn Eutelsat investment
Others 1 Gen 1 fully operational by end- 24% 2022 28% Well advanced discussions with potential backers on $0.5bn Since Gen 2 to add capacity in the Nov. 20 funding to go medium term
1 • Others including Softbank, Hughes and other minority shareholders 46 CUTTING EDGE TECHNICAL FEATURES
LOW-LATENCY Relevant for latency sensitive apps incl. Cloud /5G
GLOBAL COVERAGE Uninterrupted service and access to untapped markets
LOW LOOK ANGLE Enhanced signal reception in all configurations
HARDWARE SIMPLICITY Easy-to-install and low-cost vs. MEO
COST-EFFECTIVE Improved competitivity vs. terrestrial in remote areas
47 ONEWEB RIGHT TO WIN IN NON-GEOSTATIONARY
6 GHz of globally harmonized bandwidth secured from ITU PRIORITY SPECTRUM Highest priority in Ku-band RIGHTS Other LEOs have the burden of coordination to not interfere in Ku-band
FIRST ENTRANT WITH Fully global coverage by end-2022, ahead of any other LEO/MEO GLOBAL COVERAGE constellation
SCALABLE Gen 2 optionality to provide more capacity at a significantly reduced cost TECHNOLOGY with enhanced operational flexibility
~$5n already funded prior to Eutelsat investment; ALMOST FULLY FUNDED $0.5bn of funding to go;well advanced discussions with potential backers
DIVERSIFIED GLOBAL Opening market access and commercial opportunities in mature and SHAREHOLDER BASE emerging areas
48 AN ATTRACTIVE ENTRY POINT IN LEO FOR EUTELSAT
Number of possible global constellations is limited to 4-6 by regulatory, OPPORTUNITY physical and operational constraints The total cost for a standalone constellation amounting to several $bn
OneWeb now almost fully funded with ~$5bn already funded (before our investment) and low funding-to-go
TIMING Supported by a diversified shareholder base
System in final phase of development with a partial coverage from end-2021, full global coverage by end-2022
$550m to become a leading shareholder in a promising growth asset (almost equivalent to gross C-Band proceeds) PRICING Opportunity to buy a high potential asset with scalable technology
Investment compatible with our hurdle rates even in a stretched scenario
49 CONSISTENT WITH OUR FINANCIAL FRAMEWORK
100% Cash financed by C-Band proceeds and cash on balance sheet
$507m C-Band proceeds to be fully received ahead of schedule in FY 22
€1.9bn liquidity as of end-March 211
No change to dividend policy
Stable to progressive dividend confirmed
Commitment to Investment Grade credit ratings
Solicited ratings from S&P and Fitch
All financial objectives confirmed
FY 21 Operating vertical revenues: €1,200m to 1,220m at 1.14 /$ rate
FY 22 Adjusted Discretionary Free-Cash-Flow: €390m to €420m at 1.14 /$ rate
Medium-term Net Debt to EBITDA ratio of c.3x
1 50 • €1.4 billion when restated for the upcoming € 500 million bond maturity COMPELLING ECONOMIC POTENTIAL
Potential of at least 10-20% long-term market share in key verticals
Revenues expected to reach c.$1bn per annum in 3 to 5 years following the full deployment of the constellation
Highly profitable wholesale approach
Largely self-financing in the medium term
Investment compatible with our hurdle rates
51 A MAJOR STEP IN OUR CONNECTIVITY STRATEGY Combination of Eutelsat and OneWeb getting the best of GEO and LEO
Eutelsat will continue maximizing cash-flow extraction from its high-profitable heritage business…
……underpinning delivery of strong returns to shareholders
… and grow its Fixed Broadband vertical leveraging EUTELSAT KONNECT and KONNECT VHTS…
OneWeb will be the main growth engine in non-Broadcast and non-Broadband applications…
... combining resources and assets to boost overall commercial potential
52 5. APPENDIX
5.1 2020-21 half year financials
5.2 OneWeb
5.3 Miscellaneous
53 STRUCTURING EUROPEAN BROADBAND STRATEGY
Launch of Major wholesale Acquisition of BBB Disposal of our stake KONNECT agreements European business1 in EBI
Gradually operating from Major wholesale agreements with Direct distribution essential to Rationalizing broadband assets November 2020 Orange and TIM quickly grow the base Simplifying broadband operations Bringing capacity in high-demand Firm commitments for distribution Immediate access to an efficient areas of French and Italian capacity on and scalable retail platform with Moving towards an open KONNECT and KONNECT VHTS proven track record across technology Improved end-user experience Europe Discussions with other European Freeing up financial resources for Superior economics and flexibility players underway Enabling maximisation of investment in direct distribution customer value over time
Preparing for the ramp-up of KONNECT and KONNECT VHTS
54
•1 European satellite broadband Business only WHOLESALE COMMITMENTS SECURING CAPACITY RAMP-UP
Customer Application Satellite Coverage
Fixed •EUTELSAT KONNECT Mainly •KONNECT VHTS France Broadband Total contract value: >€450m
Average duration: ~12 years Fixed •EUTELSAT KONNECT Italy Broadband •KONNECT VHTS Over 20% of total capacity
Government •KONNECT VHTS Europe / Mobility
Recent momentum highlighting increasing interest of Telcos for satellite Broadband Discussions with other operators progressing well
55 ACQUISITION OF EUROPEAN ACTIVITIES OF BIGBLU BROADBAND1
BBB IN A STRATEGIC FINANCIAL TERMS SNAPSHOT RATIONALE
Largest distributor in Europe with Limitations of previous indirect Acquisition price of c£38m proven track record model Strong success of PPP since 2019 Fragmented base of subscale ~50k subs across expanding pan- partners lacking means Implied 10x EBITDA multiple European footprint2 Better access to end-user Strengthened ability to pilot retention Obviating the necessity to invest in and upsell initiatives optimizing yield our own retail channel Unique network of installers and and churn resellers Direct control of product definition Scalable platform for direct sales and price Closed on 1 October 2020 Digital marketing platforms, Multi- Faster alignment with market needs lingual call centers, billing systems, CRM…. Control of distribution levers Salesforces incentives, communication and promotion
56 •1 European satellite broadband business only
•2 Operations in UK, Ireland, France, Germany, Italy, Spain, Portugal, Poland, Hungary and Greece RETAIL STRATEGY being rolled-out in Fixed Broadband
Retail packages indicative prices Integration of BBB Europe well on track
Launch of initial retail offers across Maximum speed1 Europe offering a compelling value proposition 30 50 100 • Retail prices including terminal lease Mbps Mbps Mbps • Accessible upfront fees including installation Monthly fee2 Upfront Rental of the kit included fee Initial results fully in line with expectations on limited initial capacity 29.99€ 44.99€ 69.99€ 49€
Net additions set to ramp-up with 29.99€ 44.99€ 69.99€ 148€ satellite at full speed 29.99£ 44.99£ 69.99£ 49£
Offers to be expanded to additional 24.99€ 39.99€ countries in the coming months 59.99€ 49€ 22.99€ 34.99€ 49.99€ 49€
1 On the Easy Starter, Zen, Max service plan, after 20GB, 60GB and 120GB of data usage, the data might be prioritized behind other customers 57 during network congestion. The data traffic is not accounted during the night (from 1 to 6 am – local time); 2 Indicative standard price for a 12 month commitment in Germany, Ireland and the UK. Promotional price for the first 24 months in Spain and Portugal then aligned with the German/Irish tariff after this period. FINANCIAL IMPACTS OF CHANGES IN PERIMETER
ACQUISITION OF DISPOSAL OF COMBINED IMPACT BBB EUROPE STAKE IN EBI ON FINANCIAL OBJECTIVES
•Consideration of c.£38m •51% stake sold for an initial consideration •Net impact of the combined operations of €140m1 for the first full FY following completion of •Closed on 1 October 2020 the transactions
c. -€20m on Operating Vertical Revenues •Two years following completion, the consideration may be adjusted up or down c. -€30m on Discretionary Free-Cash-Flow by up to €20m depending on the level of •Impact absorbed in Operating Verticals certain EBI revenues over the period for FY 2020-21 objective
•Adjusted Discretionary Free Cash-Flow •Transaction also resulting in the deconsolidation by Eutelsat of cash held by objective for FY 2021-22 mechanically EBI adjusted
•Closed on 30 April 2021
58 1 • Subject to a customary net working capital and net debt adjustments at the time of completion KONNECT AFRICA TO CONNECT THOUSANDS OF SCHOOLS IN DRC
• MoU to provide high speed connectivity to 3,600 schools in DRC as part of Schoolap project
• Access to a digital platform of high quality teaching materials provided by local partners
• Scope to expand in the future
> 20,000 rural schools in DRC
Potential expansion to other countries
• Highlights opportunity of government needs in e-education, e-agriculture, e-administration…
Strong potential of government- backed digital inclusion programs in SSA
59 KONNECT AFRICA SAMPLE PACKAGES Example for Ivory Coast
60 ROBUST CHANNEL KPIS
Stable • Slight decline in Europe including lower line up at 6,867 6,608 6,864 5°W following E5WA end of life in stable orbit and decline in Sky Italia line-up +4% CHANNEL COUNT • Progression in emerging markets, in particular LATAM (BluTV) and SSA (Multichoice) March Dec. March 2020 2020 2021
+11%
1,667 1,767 1,853 • Double-digit Y-o-Y growth in HD +5% HD 24% 27% 27% • HD line-ups progressing at most key orbital slots PENETRATION • 27% penetration March Dec. March 2020 2020 2021
+7%
4,731 4,774 5,045 • MPEG-4 penetration more advanced than HD +6% MPEG-4 69% 72% 73% CHANNELS • Transition almost completed at Hotbird
March Dec. March 2020 2020 2021 61 SIGNIFICANT PROGRESS ON ALL COMPONENTS OF CASH GENERATION SINCE FY 16
Item Achievement Status
Cash Capex Guidance reduced from €500m to €400m Delivered
LEAP 1 program generated €32m savings in Opex FY 19. LEAP 2 targeting a further €20-25m by In Progress FY 22
> €60m savings through Cash interest Delivered bond refinancing
WCR Substantial improvement in H1 FY 21 In Progress
> €750m asset sold at a ~8x average EBITDA Asset Disposals Delivered multiple*
Corporate Reduction of >€70m in tax burden after Delivered tax change in French Finance law
62 •* Including completion of the disposal of Eutelsat’s 51% remaining stake in EBI which is expected by end of Q1 2021. ‘LEAP 2’ COST SAVINGS PROGRAM
•Objective of €20 to 25m savings by FY 22 confirmed Half of this amount to be delivered by the end of current fiscal year
•Multiple measures addressing mainly staff costs Reduction of c.100 in headcount outside of France
Global hiring freeze in the legacy businesses
Austerity measures within France → Including a global compensation freeze over three years
•Savings destined to support deployment in Connectivity while preserving the EBITDA margin
•Project was presented to relevant staff representative bodies
63 ROBUST ASSET DISPOSAL PROGRAM
H2 2016 H1 2018 H2 2018 2017 / 2021
70% stake in 34% stake in Interest EBI* Wins/DHI Hispasat in EUTELSAT 25B (KA-SAT satellite)
€42m €302m €135m €273m
>€750m asset sold in five years at a ~8x average EBITDA multiple
64 •* Including completion of the disposal of Eutelsat’s 51% remaining stake in EBI which is expected by end of Q1 2021. SATELLITE PROGRAMME CAPEX PROFILE TYPICAL TIMING OF CAPEX PAYMENTS
BREAKDOWN OF CAPEX 30% Other 6.0% YEAR 1
Satellite Insurance 50.0% 10% 30%
YEAR 2
► Capex generally40% split equally over three years prior to launch YEAR 3 ► Insurance paid in Launcher year three 34% Capex generally split equally over three years prior to launch
Insurance paid in year three 65 HOTBIRD CONSTELLATION REPLACEMENT SHOWCASING EFFECTIVENESS OF OUR DESIGN-TO-COST POLICY
COMPELLING PROCUREMENT TERMS ENHANCED QUALITY OF SERVICE
Two large satellites replace three for the same Improved wide-beam performance number of operational transponders Additional high-power superbeam Improved match of coverage with customer requirements Incremental anti-jamming features
Electrical propulsion enabling larger satellites High level of restorability for a given mass
Increased in-orbit life ENHANCED SERVICE LEVELS DELIVERED WITH SIGNIFICANT CAPEX SAVINGS GREATER VALUE EXTRACTED FROM OUR CORE VIDEO BUSINESS
66 SATELLITE ECONOMIC MODEL1: REGULAR CAPACITY
67 •1 For a greenfield satellite, using chemical propulsion IR CONTACTS Joanna DARLINGTON T: +33 1 53 98 31 07 E: [email protected]
Cédric PUGNI T: +33 1 53 98 31 54 E: [email protected]
Alexandre ILLOUZ T: +33 1 53 98 46 81 E: [email protected]
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